Back in law school I had (and thankfully today still have) a very good friend and partner in the moot court competitions named Bryan Haynes. While Bryan and I were very much alike, his desire lay in practicing pure corporate / commercial law while I was happy to focus more on litigation. As the years went by, he practiced corporate / commercial law in Vancouver and then Calgary at the big law firms (he’s now a partner at Bennett Jones) while I focused on litigation with the big firms in Toronto. But that was about where our views on the practice of law ended and have remained divergent.

Bryan writes an article every month or so in Canadian Lawyer magazine. This month his article deals with a recent decision of the Supreme Court of Canada in a case involving a tender process in British Columbia where the plaintiff lost the contract to what turned out to be an ineligible bidder. The contract, however, said that no claims could be brought against the government that issued the call for tenders. The Supreme Court held that the parties could not have really thought that this meant that they would allow no claims for ineligible bidders to sneak in, make a bid and win. Bryan’s response to this result was one of displeasure and criticism and, to be honest, I share his view. I agree that the law of contract should be focused upon certainty in contractual terms and the ability of businesses to know what their contracts mean and to be able to rely upon their provisions.

While I agree wholeheartedly with Bryan and his views, though, I always have to view this and every other case through a certain context: the prism of litigation. I am asked on a daily basis: “Will we win?” And almost always my answer is something along the lines of “… it depends …” It depends on the judge – they are human after all. It depends on how the facts come out in evidence – it isn’t a matter of simply putting in the facts but how persuasively those facts are assembled and presented. Sometimes it depends on timing – for example, I once won a significant decision that appeared doomed to fail except a few days before the hearing the Court of Appeal set out new rules which completely supported my client and a “likely loser” suddenly turned into a “sure winner”. It depends on the law. But it also depends on the concept of equity. Put simply, equity is the all-powerful tool of the courts to determine that whatever the law says shouldn’t always be applied for reasons of fairness and justice. Does this mean that judges can run around making whatever decisions they simply feel like? No, there are definite rules and constraints within which equity is to be used.

The point of all of this is to say that there is no definite set of criteria to establish whether a case will win or lose. And while Bryan and all other commercial lawyers desperately search for certainty in contracts, the litigators all sit back and quietly smile and think “keep dreaming”. Over 95% of all lawsuits settle. Why? Because one side realizes that the other will win? If that’s the case then (not counting those who sue or fail to settle for purely non-legal reasons) there is usually little reason why a lawsuit would settle on the eve of trial as opposed to before the lawsuit even begins. Rather, in my opinion, one of the largest factors for lawsuits to settle – especially as one gets closer to a trial – is the inherent uncertainty of how the trial will end. If it was a foregone conclusion that one side would win, then that side would bring a summary judgment motion and there would not be a need for trial since judgment would be granted.

So, the next time you come to see me (or a fellow litigator) and say that you want to sue and then after giving all of the facts you ask whether you will win and the answer given to you is far from conclusive and lacks the certainty that a commercial lawyer would want, now you’ll know why. And, conversely, if you get close to trial and your lawyer gives you a statement of support that is full of certainty (”how can we not win?” / “the other side has no case” / “it’s like taking candy from a baby” / etc.), you might want to ask your lawyer why, if it’s such a good case and a clear winner, that there’s even a need for going to trial. Your lawyer may have a very good reason why that is the case, but, if nothing else, you should go into any lawsuit with the knowledge that the only certainty is that there is always some level of uncertainty.

Does that frustrate commercial lawyers like my friend Bryan? Sure it does. Does it frustrate our clients. Again, yes. But that’s why trials and lawsuits are more art than science.  And maybe that’s why he has more hair than I do because he doesn’t tear his hair out worrying about how to “paint a masterpiece”

Something to think about.

CALC

I just had an opportunity to read an interesting little decision from a couple of weeks ago by the New York Court of Appeals. It involved the French fashion designer John Galliano. It seems that Mr. Galliano entered into a licensing agreement for various products in the U.S. with a company known as Stallion, Inc. After a dispute regarding how much money was owed by each side to the other, Mr. Galliano sued Stallion in the Paris courts in 2002. (The contract had specified that any disputes should go before the French courts – yet again why I trumpet/warn you all about these clauses.) Stallion was served with notice of the lawsuit but decided not to put forward a defense in Paris. Not surprisingly, Mr. Galliano obtained a default judgment and Stallion waited for Galliano to try and enforce the judgment in New York – which is what Mr. Galliano proceeded to do.

In opposition to the action by Mr. Galliano to have the New York Courts recognize the Paris judgment, Stallion tried to argue that certain technical defences applied. The New York Courts gave short shrift to these arguments. What was interesting, though, was that Stallion also argued that the process was unfair, and ought to be overturned, because the papers that it had been served giving it notice of the lawsuit in France were written in French and had not been translated into English. The Court of Appeals gave even shorter shrift to this argument and found that since Stallion had been personally served that this was sufficient – even though there was no English translation provided.

So, the next time you get served with something that looks official but isn’t in English, you might want to take a trip right away to a translator or interpreter’s office and find out exactly what it says. Hmmm, mais où est-ce qu’on peut trouver un avocat qui peut lire et parler le français? [Transl: "Hmmm, but where can one find a lawyer who can read and speak French?"] Did I mention my phone number and e-mail address? Let’s see, given the number of times that a New York client is going to be sued by a French company and suddenly find itself in need of a lawyer who can read the French documents … yeah, I won’t hold my breath or sit by the phone in anxious anticipation.

CALC

There are two key considerations that should be made when dealing with transactions involving parties in different locations: what law should govern the transaction and whose courts should be able to determine any disputes that arise from the transaction. The first consideration is known as a “choice of law” while the second is known as a “choice of forum”. So, for example, if Person A is in Toronto and Person B is in New York City and they enter into a contract, which law will govern – Ontario or New York? Similarly, can Person A sue in Ontario? Can Person B sue in New York? What if Person B wants to sue in Ontario or Person A in New York?

There are numerous rules that will determine which law would apply and which courts would agree to assume jurisdiction to hear the dispute. However, the best way of doing this would be to make an express provision for this in the contract. For example, one can add a provision in the contract that says something along the lines of “The parties hereto agree that the subject-matter of the within Agreement shall be construed in accordance with the laws of [whichever location is selected] and the parties hereby agree to attorn to the exclusive jurisdiction of the Courts of that [state / province / country] for the resolution or determination of any disputes arising out of this Agreement.” [Please note that this is not properly worded and has been used solely for illustrative purposes - I wouldn't want you to simply cut and paste this and think that it will do the trick for you.]

So, this then takes us to the next question – which laws and which courts should you use? In my example, the two obvious choices are Ontario and New York. But are you restricted to just those two choices? Nope. If you wanted to choose the law of the Ivory Coast and the courts of that country to govern, you could do so if you really wanted. It probably wouldn’t be a very cost-effective choice to make, but both parties could do that if they really wanted to. Why would they want some other location? The objective answer would be that the courts of that other location would not necessarily prefer one party over the other. As well, it could be that the law in that other location is seen as being more favourable to the parties than, in my example, either the law of Ontario or the law of New York State.

So which one should you choose? That I cannot tell you because it will depend on your particular circumstances. However, I did read this evening the June 2010 issue of the American Bar Association Journal and they had a little note that indicated that the 2010 survey of U.S. businesses showed that for the fourth year in a row the worst tort liability system among the U.S. States is West Virginia while the State of Delaware is viewed as the best lawsuit climate (and this has been the case since this survey’s inception in 2002). So, if you are negotiating a contract and the other party wants to have disputes resolved by the Delaware Court applying Delaware law, you should be more willing to agree to this than if they suggest that the Court in West Virginia have authority to apply West Virginia law.

Whichever location you are thinking about, please bear in mind one thing: speak to a lawyer in that location! I often get calls from clients or potential clients asking me to look at a contract that will be governed by the laws of somewhere other than Ontario or New York State. I would like to say that all laws are the same but they are not. Let’s suppose that you are selling your business (and it is an asset sale – as opposed to a share sale). If you are selling here in Ontario, then there are special rules under the Bulk Sales Act that you have to comply with. Most other Canadian provinces have repealed their versions of the Bulk Sales Act. If you are in Saskatchewan and agree to a contract being governed by the law of Ontario, your Saskatchewan lawyer may not know about the Bulk Sales Act requirements. Similarly, I will not know whether there is some quirky legislation in Saskatchewan, in West Virginia or in Delaware that you should be aware of before you enter into the transaction. So, before you agree to any clause that is for the law to apply of someplace other than where you are conducting business, you should definitely check with a lawyer there to avoid any unpleasant discoveries regarding that law after the litigation has started.

Something to think about.

CALC

The Ontario Court of Appeal released a decision last Friday that may be of interest for small business owners.

A fairly typical practice is for an entrepreneur to incorporate a company and then to advance loans to the company for startup capital. If this is seen as pure “equity” then if the company goes under the entrepreneur runs the risk of losing whatever he/she put into the company. To try and avoid this problem, it is not uncommon to see the company give security over various assets to the owner so that if the company goes under the owner can try and get repaid his/her investment from the assets. (At this point I should mention that while this is somewhat effective, it is often undermined by the fact that most lenders will require the owner to “subordinate” his/her security to that of the lender so that the lender gets the first crack at the assets’ value to satisfy the debt owed to the lender.)

The difficulty is that the personal property security regime in Ontario is stringent and this fact was emphasized again by the Court of Appeal. In that case, the company was incorporated with the name “Friction Tecnology Consultants Inc.” Note that “Tecnology” was misspelt with the letter “h” missing from the word. It is not clear whether this was an oversight or was intentional. In any event, the company dealt with the rest of the world under the name “Friction Technology Consultants Inc.” – that is, with the correct spelling of the word “Technology”. Friction factored its receivables and then obtained a loan from a bank. When Friction failed financially, the factor and the bank fought over who had priority to the assets. Why did this matter? Because the factor had registered its security against “Friction Technology Consultants Inc.” – with an “h” – while the bank had registered against the company name as it was properly registered – that is, without the “h”.

The Court of Appeal upheld the lower court decision that since the properly registered name did not have the letter “h”, then only the bank had properly registered its security and it won the priority fight. A harsh lesson for the factoring company.

So why should you care? The simple reason is because many small businesses either seek to do incorporations by themselves or else have “quickie” incorporations done to save money. There is nothing wrong with this, but you should ensure that there are no discrepancies like existed in the recent case. The reality is that once the incorporation takes place, the entrepreneur rarely ever looks again at the articles of incorporation and over time may simply assume that there is nothing wrong or different between the “real name” and the name being used by the business. But this type of oversight could very well create problems for you in the future if it turns out that your security is in the wrong name and now whatever protection you thought you had turns out to be nothing.

Something to think about.

[Meanwhile, as a little post-script, I have to say that this particular post was probably my most fun to write as I got to do so using my new iPad. It's a welcome addition to my technology lineup. And it's kind of a fun "toy" at times as well. ]

CALC

Another opportunity to preach from the pulpit of experience.  I was in the Superior Court today on a motion asking that the claim against my client, a large bank, be dismissed.  The situation was, unfortunately for the bank’s customer, something that is happening more and more frequently.  The customer left all of its accounting to its bookkeeper and gave total control to the bookkeeper.  In this instance, the bookkeeper went on an extended leave and the company brought in another bookkeeper from a temp agency.  After a month or so, the temp bookkeeper proceeded to cut a bunch of cheques to his company and deposited them.  By the time he had over $340,000 he suddenly “disappeared” along with the money.

Now comes the bad part for the customer.  Because it had left absolutely everything to the bookkeeper (and then to the temp), the customer had no clue what to do about its accounting records and decided to wait until the regular bookkeeper returned about 6 weeks later.  The problem, though, was that by the time the regular bookkeeper had returned and immediately discovered what had happened, it was too late to do anything.  The temp had left the country with the money so the bank couldn’t get it back.  The company then said to the bank that the bank ought to reimburse the company for its lost money – to which the bank replied that it wasn’t an insurance company and the lack of supervision wasn’t the bank’s fault.

The customer sued the bank and the bank responded with a motion to have the lawsuit dismissed.  The bank relied on two portions of its account opening agreement.  The first provided that any problems with the account should be brought to the bank’s attention within 30 days of the monthly account statement being issued.  The second portion provided that forged cheques would not be covered unless the customer could show that it had adequate supervision and took steps to avoid the forgeries.  These are both standard provisions that you see in every bank account opening form.  They are even usually put in bold lettering (as was the case here).

The customer effectively said “but nobody brought this to my attention” and besides, the bank should have warned me that my accounting systems were inadequate.  The Court disagreed and the case against the bank was dismissed and the customer now has to pay the bank over $14,000 in costs.

The primary moral of the story – if the customer had stopped to look at its obligations under its contract with the bank, it would have known that it should have reported this matter more quickly to the bank and should have taken more care to avoid any forgeries from occurring.  By disregarding the fine print, the customer is now stuck with not only the more than $340,000 in lost money, but also a further hit of $14,000 + for costs.

The secondary moral of the story – think twice before you try to take on the big banks (or even landlords or other companies with standard form agreements) when you have signed a contract that makes it quite clear what you are required to do.  If you didn’t read the fine print before you signed, then you’d better make sure you do before you sue because you could end up wasting a lot of money on a lawsuit that won’t get very far.  To give an example, the costs awarded were $14,000 – of which the total amount of costs for the bank were approximately double that amount.  The amount of the customer’s costs have been approximately the same.  So, to bring this lawsuit, the customer has spent approximately $28,000 so far for its lawyer and now has to pay the bank another $14,000 – for a total to date of $42,000.  It may well be that the customer will have a good claim as against the temp agency, but if it doesn’t win (and it might not depending on what background checks the temp agency did or could have done), then this could prove to be a VERY expensive lesson in futility – due, in part at least, to not paying attention to the fine print.

Something to think about.

CALC

I’m sure you’ve heard the competing ads on the radio over the past year or so.  The first is from a fairly well-known law firm that says that they have the way to deal with the tax man and that they can use the power of solicitor-client privilege to protect you and that you can’t get this from an accountant.  The second is from an accountant who says “you don’t really think that Revenue Canada is going to put you in jail, so you really don’t need to pay for an expensive lawyer.”  Who’s right?  Both are.

There is a case from many years ago called Tax Time where the Court held that there is no such thing as “accountant-client” privilege.  So, the law firm is correct when they say that if you tell everything to your accountant then Revenue Canada could turn around and haul the accountant in and require him/her to disclose all of your information.  (Whether they would actually go to all this trouble is another question.)  Revenue Canada could not do that if the information is covered by solicitor-client privilege.  However, the flip side is true in that lawyers are expensive – although, I generally find myself envious that I cannot charge the amounts charged by many accountants, so it’s a bit ironic that the accountant is suggesting that the lawyers’ fees are too high.  I can give one example where I was consulted by a potential client who had gone to the other law firm and that firm had asked for a five figure retainer just to review the potential client’s file and determine whether the client had a valid claim.  Not cheap, to say the least.  But in all fairness, it’s not often that you can simply pick up a tax file, leaf through a few pages and be able to give a definitive answer.  It usually involves a lot of time and requires them to go through a lot of documents and if they don’t get the money up front and it turns out that there’s nothing that can be done, you can be guaranteed that the client will turn around and say “oh well, thanks” and then never pay the bill.  So, not cheap, but I sure as heck don’t blame them for asking for the money up front.

Is there an alternative?  It’s possible that there is.  I was introduced to a new web site and service yesterday for Taxpayer Relief Letters.  The program is run by Frank Flynn whom I knew when he was at Revenue Canada before he left years ago.  After several years working in another industry, he has returned to the tax area and has started his new business.  If your business is suffering financially and Revenue Canada is coming after you AND you don’t have an overly-complex matter, it looks like this service might be of interest and assistance to you.  They will take your information and prepare it in a letter or other format that will speak to Revenue Canada in its own language and assist you in making your point for why you shouldn’t pay as much (or any) penalties or interest.  Depending on the nature of your problem and the amount at stake in terms of the penalties and interest you are facing, this could well be a worthwhile alternative.  I would commend you to check out their web site.  If nothing else, it’s nice to have as many options as possible.

Something to think about.

CALC

As you will all know, last week air traffic in Europe was brought to a screeching halt by the eruption of a volcano in Iceland and the huge cloud of ash that it spewed into the atmosphere that covered most of Western Europe.  Not only did this strand hundreds of thousands of international travellers and cost billions of dollars in lost revenues, etc., it also stopped the flow of goods and, in particular, various perishable goods.  To give two examples, I have a client who operates a deli who takes great pride in having prosciutto ham delivered fresh from Italy and I have another client who is a florist who sometimes has special orders for flowers that are not grown in Ontario such as tulips from Holland.  In both instances, they obtain their products from Europe and if they needed any of those products last week, they were not going to get them because of the ash cloud and its resulting air travel disruptions.  So where does that leave them?

There is a common “boilerplate” clause that is often found in contracts and seldom thought about – if at all – by anyone, even the lawyers.  It is known as a “force majeure” clause and usually reads along the following lines:

Neither party is responsible for damages caused by delay or failure to perform undertakings under teh terms of this Agreement when the delay or failure is due to fires, strikes, floods, acts of God or the Queen’s enemies, lawful acts of public authorities, or delays or defaults caused by common carriers, which cannot reasonably be foreseen or provided against.

A few comments about these types of clauses.  The first is what is an “Act of God”?  While there is no all-inclusive list, the general approach is any natural or even supernatural disaster.  The Iceland volcano would clearly fall within this category. 

The second comment is to note the last words of the clause.  For example, if either my deli owner client or my florist client were caught without receiving an order of goods last week, they could rely on the clause.  However, what if they were to order their goods this week?  The volcano has not stopped its eruption, it has simply died down and what is being sent into the atmosphere is now just steam.  If they ordered the goods this week and then just before the orders were shipped by plane the volcano erupted again with more ash and the planes are grounded once more, then it would be difficult for them to say that the problem could not have been foreseen or provided against. 

The third comment is to note that force majeure clauses have been imported from French law and is not a naturally created concept of the English common law of contract.  As a result, you should look at your contracts to see if they include these clauses.  If they do, that’s fine.  If they do not, then the courts will not imply such a contractual term into your contract.

So what if the clause is there and it is applicable – what does this mean for you?  The answer is that it will relieve you from the contractual obligations.  So, if my florist client needed Dutch tulips for a wedding last Saturday and could not get them in time, it could have cancelled the order without having to pay for the flowers that never arrived.  This means that, for the florist, she would want to have such clauses in her contracts.  Similarly, the Dutch flower merchant would want that clause in the contract.  Suppose that my florist client had prepaid for the flowers.  If the merchant could not ship the goods, then the merchant would have to return my florist client’s money.  But the clause would similarly protect the merchant because my client would not be able to sue the merchant for whatever money was lost on her contract with the wedding party because either they cancelled the flower order or they went with other flowers that were less costly (so the florist lost part of her profit).

At the same time, this is another example of when it is helpful to have insurance to cover potential losses due to situations like the Iceland volcano.

Something to think about.

CALC

There is an article in today’s Toronto Star that talks about the concern of school boards regarding what appears to be a growing number of claims against them in Small Claims Court.  Is this really a concern?  I believe that it is and that it is not only a concern for school boards or large institutional organizations, such as banks, but it is also a concern for your small business.  Why is that the case?  A few reasons.

The first is that, as of January 1 of this year, the amount that can be claimed in Small Claims Court is now $25,000.  It’s not that $10,000 was an insignificant amount, but many defendants took the approach (quite reasonably) that if their exposure was only $10,000 plus costs then they would not hire a lawyer to represent them.  Or, alternatively, they kept the lawyers out until the matter got to the trial stage in order to save money for the steps before the trial.  Now small businesses can face a claim of $25,000 plus interest plus costs and that amount is suddenly requiring business owners to reconsider whether they should get a lawyer involved from the beginning of the case – with the increased amount of money that has to be paid on legal fees.

The second reason is that the costs of filing a lawsuit in Small Claims Court are still relatively nothing – it only costs $75.  Now, one immediately has to put this into some perspective because the cost of filing a Statement of Claim in the Superior Court is only a little more than double that cost at $181.  But, when combined with the third reason, the small amount’s impact becomes more noticeable.

The third reason is the fact that Rule 13 of the Rules of the Small Claims Court were changed in 2006 for settlement conferences.  Before that time, settlement conferences were not mandatory and many self-represented plaintiff’s did not think about settlement conferences.  As of 2006, the rule was changed to make settlement conferences mandatory for all claims.  The result is not only additional costs (at least in terms of time or productivity lost for businesses in having to attend the conferences) but also the fact that, when combined with the second reason, a plaintiff now needs only to pay $75 and he/she/it gets a chance to haul a small business before a judge who will try to put pressure on the small business (and, in fairness, on the plaintiff as well) to settle the claim.  If nothing else, that’s $75 to easily “roll the dice”.  And what happens if the matter doesn’t settle?  The plaintiff does nothing, eventually a notice dismissing the claim is sent and the defendant gets to go after the plaintiff for costs thrown away.  Oh, and that’s where the fourth reason kicks in.

In 2007 the Osborne Report recommended, among other things, increasing the judgment amount from $10,000 to $25,000.  However, Justice Osborne expressly found that there was no need to change the method by which costs are awarded in Small Claims Court.  The costs regime is governed by a combination of Section 29 of the Courts of Justice Act (which caps the costs at 15% of the amount sought in the claim – so, a maximum of $3,750 for a $25,000 claim) and some Rules – mainly Rule 19 which provides for quite small amounts for fees.  For example, $50 for the cost of preparing and filing pleadings.  However, if you use a process server to file your defence, that will easily run you $30 (that’s not a criticism but a statement of fact) so the most you can get reimbursed on whatever legal fees you have to pay to draft and revise and finalize the Statement of Defence – $20 or less.  Meanwhile, Rule 13.10 provides that unless the Court determines that there are special circumstances, the costs of a settlement conference is not to exceed $100.

So, let’s look at a scenario where someone sues your small business, forces you to defend and then takes the matter to a settlement conference, the matter doesn’t settle and the plaintiff is convinced to let the matter just die and eventually the claim is dismissed as being abandoned.  What has it cost the plaintiff in terms of “hard” costs?  The $75 fee to have the Statement of Claim issued.  IF, and only if, the judge at the settlement conference orders that costs are to be paid (which is a rare event), then we have an additional $100.  Then we have the costs which can be awarded for preparing and filing the defence – $50 maximum.  And that’s the amount that you will get, $150, IF you go to the trouble of going to the court and asking for your costs to be paid.  Most people wouldn’t even bother.  With all due respect to Justice Osborne and his report, the failure to modify the costs system for Small Claims has left a huge hole in the system and is now, in part, why we see the increase in Small Claims Court claims.

The fifth reason is that not only do you not need a lawyer to have a claim in Small Claims Court (technically you don’t need one either in Superior Court or the other courts), but the rules and the system are geared towards helping people “do it themselves”.  That is not a bad thing at all.  But the simpler system also contributes to the number of people who have less than meritorious claims bringing those claims forward when a lawyer’s assistance might have shown them that their claims are doomed to fail for whatever reason.

These five reasons, combined with other lesser reasons, have contributed to the increase in the number of people willing to “roll the dice”, “take a run”, whatever phrase you wish to use.  While I have gone on rants in the past about one item or another, this is NOT a rant against the Small Claims Court system.  It has its faults, no question.  However, if there was a perfect system for dispute resolution, then there probably wouldn’t be a need for that system because we would also have found a way to avoid the disputes in the first place.  Moreover, every one of the changes that were made over the years were made for perfectly laudable reasons.  The point of this post is to show how a convergence of the different rule changes, some taking place recently, some in 2006, some going back for decades, appear to stand now for the possibility that your small business could face more litigation than in the past – with most of it taking place in the Small Claims Court for $25,000 or less.

How can you avoid or reduce this effect?  One is to have your standard contracts, purchase orders, etc. include alternative dispute resolution clauses – for example, any disputes under $25,000 have to go to arbitration.  Another way could be to provide for shorter limitation periods (for an amount of time less than two years) - so that if the plaintiff doesn’t sue in time you can bring a motion to have the claim dismissed.  But you have to remember that whatever you do you have both benefits and detriments.  For the two examples, the benefits are to avoid the lawsuit in Small Claims Court or to quickly kill the claim.  The detriments are, respectively, that with arbitration you can have severely limited appeal rights in some cases and if the limitation period applies to all parties then you could also be caught with more restricted deadlines if you want to sue.  As a result, any changes to your documentation to avoid or reduce the risk of being caught in this growing trend to sue in Small Claims Court should be discussed with your lawyer to ensure that any “positive” changes you make don’t find a way to backfire on you.

Something to think about.

CALC

I read an article that appeared in last week’s Your Business magazine in the Globe and Mail.  It is entitled “There Must be 50 Reasons to Leave Your Partner”.  Although the reference is to “partner”, it is not solely to a partnership in the purely legal sense, but, rather, a partnership in the generic sense – that is, whether the “partners” actually have a formal partnership, are in a joint venture or are shareholders in a corporation or some other arrangement.

The article talks about what happens when the two or more partners decide to go their separate ways and what to do about their business.

I have to admit, though, that there’s something about the lawyer they’ve quoted.  I agree with absolutely everything he said.  I hear he’s pretty good looking too … at least in his own mind

CALC

It’s coming on tax time again.  How many of you are having chills at just the thought?  Me too.  The difference, though, is that I know two things.  The first is that when it comes to the finer nuances of tax issues, I leave this to my accountant to advise upon.  The second is that many of my clients, despite my suggestions otherwise, tend to try to save money and not use accountants – at least for the first year or two and then they realize the cost-benefit relationship of having the accountant help you.  However, I realize that for that one or two years people will still try to go it alone.  If you are one of these brave soles, then I should try to help in at least a little way.

The Canada Revenue Agency has a guide for small businesses and their tax issues.  It can be found here.  It gives some advice on income tax, GST and HST issues, payroll taxes, etc.  Hopefully it is of some use to you.

CALC